Digital bankingHow to capture the opportunity
Singapore, May 31st, 2012
Conference Presentation
CONFIDENTIAL AND PROPRIETARYAny use of this material without specific permission of McKinsey & Company is strictly prohibited
McKinsey & Company 1|
Explosion in digital interactions – By 2015, only 5% of
interactions via the branch Network
SOURCE: McKinsey 2012 Digital Banking survey, McKinsey research
Digital interactions are exploding…
2010: 100%, Europe
70
4230
19
29
28
25
2
Branch
ATM
Digital
2
34
2010
34
5
2015F
Other
Phone
45
28
122
2005
18
92
2000
McKinsey & Company 2|
Yet, it isn’t a simple shift to digital channels. Customers are
becoming multichannel users
1 Only most important paths are shown here
2 All arrows to maintenance actvities are directly from Subscription phase (i.e., Transaction and Service phases are not sequential)
SOURCE: Asia PFS CDJ/multichannel booster survey 2011
Maintenance
Transaction ServiceResearch SubscriptionAwareness
No
n-
ch
an
ne
l
Call center
ATM
Branch/personal
DM
Website/online
banking
Email/SMS
3rd party agent
Online media
WOM店舗
Offline media
Past experience
Mobile banking
Tra
dit
ion
al
Dig
ita
l3
rd
pa
rty
1
3
2
4
1
25
2
7
2
23
7
2
3
20
3
21
7
41
1 16
8
6
8
7
15
7
11
N/A N/A N/A
2
3
N/A N/A N/A
2 4
15 20
15
7
12 11
24 23 23 24
33 3330
12
6
7 6
9 9
Share of customers using each touchpoint/channel dominantly at each phase1
Percent
Touchpoints/channels
4721
23
2
3
24 25
4
3
4
4
334
4
44
63
INVESTMENT
PRODUCT EXAMPLE
McKinsey & Company 3|
Enormous benefits in terms of customer experience
SOURCE: 2012 McKinsey Digital banking survey
9
Don’t knowDecrease
21No change
Increase39
Significantly
increase31
% of respondents
1 No respondent indicated a ‘significant’ decrease in customer satisfaction
What do you expect will be the effect of mobile banking on customer
satisfaction in the next 5 years?
McKinsey & Company 4|
Average products per client
Number
Digital servicing provides a better experience to clients
translating into higher loyalty and value…
9
7
6
5
Multi-
channel
3 channels
2 channels
Mono-
channel
Average revenues per client
Indexed210
197
142
100
Multi-
channel
3 channels
2 channels
Mono-
channel
Perceived quality
of multi-channel
clients 10-15%
higher than mono-
channel ones
Average attritionrate of offline clients 2x higher than online ones
SOURCE: 2012 McKinsey Digital banking survey
McKinsey & Company 5|
0
5
10
15
0 100 200 300 400 500 600 700 800
Northern Europe
Southern
Europe
Central
Europe
Branchesper million inhabitants
FTEsper branch
Digitalisation enables radical reduction in costs as is already seen
in Northern Europe – Online banking access need to go up first!
2016
20162016
SOURCE: 2012 McKinsey Digital banking survey
McKinsey & Company 6|
Digital is considered as a defensive play mostly
SOURCE: 2012 McKinsey Digital banking survey
McKinsey & Company 7|
So far Banks see digital mainly as complementary
1 Excludes 7% of blank responses
2 For all customers
SOURCE: 2012 McKinsey Digital banking survey
2
3
3
3
19
… USP to attract new customers
… the primary channel for customer service
… the primary channel for all banking activities2
… the primary channels for transactions 26
… complementing branch networks 38
… the primary channel for sales and advice
Other
% of respondents
What is the vision for your bank's ‘digital proposition’ for the next 5 years?
Digital channels as1 …
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